12th Edition

ISBN: 9780134486444

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

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Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

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Textbook Question

Chapter 3, Problem S3.8SE

Journalizing and posting an adjusting entry for depreciation and determining book value

Learning Objective 3

On October 1, Orlando Gold Exchange paid cash of $57,600 for computers that are expected to remain useful for three years. At the end of three years, the value of the computers is expected to be zero.
Requirements

Calculate the amount of depreciation for the month of October using the straight-line depreciation method.
Record the adjusting entry for depreciation on October 31.
Post the purchase of October 1 and the depreciation on October 31 to T-accounts for the following accounts: Computer Equipment Accumulated Depreciation—Computer Equipment, and Depreciation Expense—Computer Equipment. Show their balances at October 31.
What is the computer equipment's book value on October 31?

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Chapter 3, Problem S3.7SE

Chapter 3, Problem S3.9SE

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